Philips 2014 Annual Report Download - page 129

3Group nancial statements 12.9
Annual Report 2014 129
3Discontinued operations and other assets
classied as held for sale
Discontinued operations included in the Consolidated
statements of income and the Consolidated statements
of cash ows consist of the combined Lumileds and
Automotive businesses, the Audio, Video, Multimedia
and Accessories (AVM&A) business and certain other
divestments reported as discontinued operations.
Discontinued operations: Combined Lumileds and
Automotive businesses
Philips announced in a press release on June 30, 2014,
that it will start the process to combine its Lumileds
(LED components) and Automotive businesses into a
stand-alone company within the Philips Group and that
it will explore strategic options to attract capital from
third-party investors for this business.
The company is in discussion with external investors for
the combined Lumileds and Automotive Lighting
businesses and expects to complete a transaction in
the rst half of 2015.
The combined businesses of Lumileds and Automotive
were reported as discontinued operations in the
Consolidated statements of income and Consolidated
statements of cash ows with the related assets and
liabilities as per the end of November 2014 included as
Assets classied as held for sale and Liabilities directly
associated with assets held for sale in the Consolidated
balance sheet.
The following table summarizes the results of the
combined businesses of Lumileds and Automotive
included in the Consolidated statements of income as
discontinued operations.
Philips Group
Results of combined Lumileds and Automotive Lighting
businesses in millions of EUR
2012 - 2014
2012 2013 2014
Sales 1,139 1,268 1,416
Costs and expenses (1,083) (1,134) (1,202)
Income before taxes 56 134 214
Income taxes 33 (1) (73)
Results from discontinued
operations 89 133 141
Upon disposal, the associated currency translation
dierences, part of Shareholders’ equity, will be
recognized in the Consolidated statement of income. At
December 31, 2014, the estimated release amounts to a
EUR 24 million gain.
The following table presents the assets and liabilities of
the combined Lumileds and Automotive business, as
Assets classied as held for sale and Liabilities directly
associated with assets classied as held for sale in the
Consolidated balance sheet as of 2014.
Philips Group
Assets and liabilities of combined Lumileds and Automotive
Lighting businesses in millions of EUR
2014
2014
Property, plant and equipment 666
Intangible assets including goodwill 295
Inventories 248
Accounts receivable 278
Other assets 14
Assets classied as held for sale 1,501
Accounts payable (134)
Provisions (34)
Other liabilities (149)
Liabilities directly associated with assets held for
sale (317)
Non-transferrable balance sheet positions, such as
certain accounts receivable, accounts payable, accrued
liabilities and provisions are reported on the respective
balance sheet captions.
Discontinued operations: Audio, Video, Multimedia
and Accessories business
As announced on April 28, 2014, the AVM&A business
was divested to Gibson Brands, Inc. The transfer was
eected on June 29, 2014 and in December 2014 a nal
settlement closed the deal.
The following table summarizes the results of the
AVM&A business included in the Consolidated
statements of income as Discontinued operations.
Philips Group
Results of Audio, Video, Multimedia and Accessories business
in millions of EUR
2012 - 2014
2012 2013 2014
Sales 1,414 1,189 469
Costs and expenses (1,295) (1,180) (473)
Gain on sale of business – – 10
Income before taxes 119 9 6
Income taxes (38) (3) 12
Investments in associates (3)
Results from discontinued
operations 78 6 18
The following table shows the components of the gain
on the sale of the AVM&A business.
Philips Group
Gain on the sale of the Audio, Video, Multimedia and Accessories
business in millions of EUR
2014
2014
Consideration 74
Carrying value of net assets disposed (61)
Cost of disposal (3)
Gain on sale of business 10
Income taxes 12
Net gain on sale of business 22
Assets classied as held for sale amounted to EUR 484
million at moment of disposal (December 31, 2013: EUR
400 million). Liabilities directly associated with the